| SEBI UPDATE
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| SEBI vide its circular CIR/MIRSD/ 11 /2012 dated 5 September 2012 has come out with certain clarifications regarding the KYC requirements. |
| The circular is in continuation to SEBI’s earlier circulars CIR/MIRSD/16/2011 dated 22 August 2011 and MIRSD/SE/Cir-21/2011 dated 5 October 2011 through which SEBI simplified the KYC norms and made them uniformly applicable across all the market intermediaries including stock brokers, MFs, CIS, VCFs, DPs and Portfolio Managers. |
| With FIIs, Sub Accounts and QFIs facing operational issues with the requirements, SEBI has vide this circular issued certain clarifications regarding the previous circulars. |
Some of the key clarifications are as follows:
- It is clarified that the global / local custodian (as the case may be) may subject to necessary conditions; act as the Authorized signatory for its client and also complete the KYC formalities on its behalf. In case the original documents are not available; the client can now submit copies of identity proof, SEBI registration certificate and copies of other important documents if they are duly attested by the Authorized Signatory.
- It is further clarified that in case of FIIs, Sub Accounts and QFIs, the requirement of PAN is not applicable.
- For cases where the investor does not have the CIN or an equivalent registration from investor’s respective country, the SEBI Registration number may be mentioned.
- In addition, where the QFI, being a director does not have a DIN or an equivalent number from its respective jurisdiction, then the requirement shall be considered as not applicable.
- It is also clarified that In-Person-Verification (IPV) shall not be applicable for a non-individual client. As far as a QFI- individual client is concerned, IPV shall be carried out by a SEBI registered intermediary.
- SEBI, in the annexure to the circular has also clarified as to what substitute documents shall be admissible in case of non applicability of copies of balance sheet, latest shareholding pattern, POI and POA.
- As a further clarification, it has been notified that in absence of certificates of Incorporation, MOA and AOA in case of FIIs and Sub Accounts; any reasonable equivalent legal document proving the formation of entity may be allowed. Also in case of non availability of information regarding place of incorporation, Registered Office or Principal place of business shall be treated as the incorporation place.
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| For some entities however, SEBI has exempted most of these requirements. These are the Sovereign Wealth fund, Foreign Government Agencies, Central Bank, International or Multilateral Organizations and Central or State Government Pension Fund in respect of which the intermediary shall satisfy itself about their status. |
| In addition to this, SEBI has again mandated that intermediaries strictly undertake an ongoing Due Diligence of customers based on their risk profile and financial position; as previously prescribed. |
